USA Mobility Reports First Quarter Operating Results; Board Declares Regular Quarterly Dividend

Wireless Subscriber and Revenue Trends Continue to Improve;
Software Revenues Increase, Bookings and Backlog Remain Strong;
Operating Cash Flow Higher as Expenses Decline

Business Wire

SPRINGFIELD, Va.--(BUSINESS WIRE)--

USA Mobility, Inc. (USMO), a leading provider of wireless messaging, mobile voice and data and unified communications solutions, today announced operating results for the first quarter ended March 31, 2013. In addition, the Company’s Board of Directors declared a regular quarterly dividend of $0.125 per share, payable on June 25, 2013 to stockholders of record on May 20, 2013.

Consolidated revenue for the first quarter was $53.1 million, compared to $51.9 million in the fourth quarter and $56.7 million in the first quarter of 2012. Revenue from the Company’s Wireless business (USA Mobility Wireless) was $38.8 million in the first quarter, compared to $39.9 million in the fourth quarter and $44.3 million in the first quarter of 2012. Revenue from the Software business (Amcom Software) increased to $14.4 million, from $12.0 million in the fourth quarter and $12.5 million in the first quarter of 2012.

First quarter EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) totaled $15.5 million, or 29.3 percent of revenue, compared to $18.8 million, or 33.1 percent of revenue, in the year-earlier quarter. First quarter EBITDA included $14.3 million from Wireless and $1.2 million from Software. EBITDA from Wireless of $14.3 million compared to $14.0 million in the prior quarter and $17.5 million in the year-earlier quarter.

Net income for the first quarter was $6.9 million, or $0.32 per fully diluted share, compared to $8.5 million, or $0.37 per fully diluted share, in the first quarter of 2012.

Key results and highlights for the first quarter included:

Wireless

  • Net unit losses improved to 35,000 in the first quarter from 51,000 in the first quarter of 2012, while the quarterly rate of unit erosion was 2.3 percent versus 3.0 percent in the year-earlier quarter. The annual rate of subscriber erosion improved to a record low 8.5 percent in the first quarter, compared to 9.2 percent in the fourth quarter and 11.5 percent in the year-ago quarter. Units in service at March 31, 2013 totaled 1,480,000, compared to 1,617,000 a year earlier.
  • The quarterly rate of revenue erosion improved to 2.9 percent from 4.9 percent in the first quarter of 2012, while the annual rate of revenue erosion improved to 12.4 percent from 15.7 percent in the year-earlier quarter.
  • Total ARPU (average revenue per unit) was $8.25 in the first quarter, compared to $8.29 in the fourth quarter and $8.50 in the first quarter of 2012.
  • First quarter EBITDA margin for Wireless was 36.9 percent, compared to 35.0 percent in the fourth quarter and 39.5 percent in the year-earlier quarter.

Software

  • Bookings for the first quarter increased to $14.3 million from $12.4 million in the first quarter of 2012.
  • The backlog was $40.2 million at March 31, 2013, compared to $32.7 million a year earlier (as restated).
  • Of the $14.4 million in Software revenue for the first quarter, $6.8 million was maintenance revenue and $7.6 million was operations revenue, compared to $6.4 million and $6.1 million, respectively, of the $12.5 million in Software revenue for first quarter of 2012.
  • The renewal rate for maintenance in the first quarter was 98.8 percent.

Total Company

  • Consolidated operating expenses (excluding depreciation, amortization and accretion) totaled $37.6 million in the first quarter, with $24.5 million for Wireless and $13.1 million for Software, compared to $38.0 million in the first quarter of 2012, with $26.8 million for Wireless and $11.2 million for Software.
  • Capital expenses were $2.3 million, compared to $1.6 million in the first quarter of 2012.
  • Dividends paid to stockholders totaled $2.7 million in the first quarter.
  • The Company’s cash balance at March 31, 2013 was $71.7 million.
  • The number of full-time equivalent employees at March 31, 2013 totaled 656, including 367 for Wireless and 289 for Software, compared to a total of 685 at March 31, 2012, including 420 for Wireless and 265 for Software.

Vincent D. Kelly, president and chief executive officer, said: “USA Mobility continued to make excellent progress in the first quarter. Both our Wireless and Software businesses met or exceeded their performance goals in virtually all operating categories as consolidated revenue increased and expenses declined from the prior quarter. In addition, we continued to maintain strong operating cash flow and operating margins, and generated sufficient cash flow to again return capital to stockholders in the form of dividend distributions.”

Kelly added: “Once again our Wireless business exceeded expectations for gross additions, revenue, ARPU, and expenses. We were also pleased to see our annual rates of subscriber and revenue erosion reach record lows.”

Kelly said the Company’s Wireless sales efforts during the quarter continued to focus on the core market segments of Healthcare, Government and Large Enterprise. “These core segments represented approximately 92 percent of our direct subscriber base and 88 percent of our direct paging revenue at the end of the quarter. Healthcare comprised 72.5 percent of our direct subscriber base at March 31st and continued to be our best performing market segment with the highest percentage of direct gross additions (82.6%) and the lowest rate of direct net unit loss (0.5%). Clearly, Healthcare providers continue to recognize and benefit from the reliability and cost advantages of paging for their most critical messaging needs.”

Commenting on the Software business, Kelly said: “First quarter revenue and bookings increased from the year-earlier quarter while our backlog was up 23 percent to $40.2 million from a year ago. In addition, our sales team brought in a record number of large contracts during the quarter from the Healthcare and Government business segments and continued to build a solid pipeline of prospective business. Customer demand remained strong for such software solutions as call center management, clinical alerting middleware, critical smartphone communications and emergency notification. While sales activity remained strongest in North America, we also added new accounts in the Asia-Pacific region and Middle East, including a major medical and research center in Qatar.”

During the quarter the Company introduced a software upgrade that significantly improves physician and nurse communications. “The enhancement links two of our most popular software solutions, Amcom Mobile Connect and Amcom Care Connect,” said Kelly. “Amcom Mobile Connect supports secure and HIPPA-compliant text-messaging, while Amcom Care Connect helps caregivers connect quickly on their own schedules and preferred devices. The new feature – Amcom Mobile Connect 3.3 – provides a “chat view” screen and updates page that makes it easier for caregivers to connect with one another. The solution gives physicians and nurses the flexibility to talk or text, plus it incorporates critical escalation features when a caregiver is unavailable. Many of our 900 hospital customers had previously requested this specific type of solution, so we’re very pleased to be able to integrate this capability to enhance patient safety and care.”

Shawn E. Endsley, chief financial officer, said the Company continued its positive momentum from 2012 in both the Wireless and Software businesses. “Lower revenue and subscriber churn along with operating expense management in the Wireless business contributed to strong operating cash flow and EBITDA,” he noted. “In addition, higher bookings and backlog in the Software business reflect continuation of the positive trends from the second half of 2012.”

Regarding financial guidance for 2013, Endsley said the Company currently projects total revenue to range from $195 million to $213 million, operating expenses (excluding depreciation, amortization and accretion) to range from $150 million to $152 million, and capital expenses to range from $8.1 million to $9.7 million.

USA Mobility’s Annual Meeting of Stockholders will be held at 9:00 am EST on Tuesday, July 23, 2013 at The Westin Alexandria, 400 Courthouse Square, Alexandria, Virginia.

USA Mobility plans to host a conference call for investors on its first quarter results at 10:00 a.m. Eastern Time on Friday, May 10, 2013. Dial-in numbers for the call are 719-325-2432 or 888-417-8516. The pass code for the call is 8073557. A replay of the call will be available from 1:00 p.m. ET on May 10 until 1:00 p.m. on Friday, May 24. Replay numbers are 719-457-0820 or 888-203-1112. The pass code for the replay is 8073557.

About USA Mobility

USA Mobility, Inc., headquartered in Springfield, Virginia, is a comprehensive provider of reliable and affordable wireless communications solutions to the healthcare, government, large enterprise and emergency response sectors through its wireless subsidiary, USA Mobility Wireless. In addition, through its software subsidiary, Amcom Software, it provides mission critical unified communications solutions nationally and internationally to leading organizations in such industries as healthcare, hospitality, education, business and government. Amcom connects people to each other and the data the need. Its software solutions include critical smartphone communications, contact center optimization, emergency management and clinical workflow improvement. As a single-source provider, USA Mobility Wireless focuses on the business-to-business marketplace and supplies wireless connectivity solutions to organizations nationwide. The Company operates the largest one-way paging and advanced two-way paging networks in the United States. USA Mobility Wireless also offers mobile voice and data services through Sprint Nextel and T-Mobile, including BlackBerry® smartphones and GPS location applications. Its product offerings include customized wireless connectivity systems for the healthcare, government and other campus environments. For further information visit www.usamobility.com and www.amcomsoftware.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act: Statements contained herein or in prior press releases which are not historical fact, such as statements regarding USA Mobility’s future operating and financial performance, are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that may cause USA Mobility’s actual results to be materially different from the future results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expectations include, but are not limited to, declining demand for paging products and services, continued growth of our Software business and demand for our Software products and services, our ability to develop additional software solutions for our customers, the ability to continue to reduce operating expenses, future capital needs, competitive pricing pressures, competition from both traditional paging services and other wireless communications services, competition from other software providers, government regulation, reliance upon third-party providers for certain equipment and services, as well as other risks described from time to time in periodic reports and registration statements filed with the Securities and Exchange Commission. Although USA Mobility believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. USA Mobility disclaims any intent or obligation to update any forward-looking statements.

                       
USA MOBILITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (a)
(Unaudited and in thousands, except share, per share amounts and ARPU)
 
For the three months ended March 31,
2013   2012  
Wireless     Software     Total Wireless     Software     Total
 
Revenue:
Paging service $ 37,051 $ - $ 37,051 $ 41,875 $ - $ 41,875
Cellular 195 - 195 277 - 277
Software revenue and other (b) 1,372 14,351 15,723 1,787 12,470 14,257
Other   161         -         161     326         -         326  
Total revenue   38,779         14,351         53,130     44,265         12,470         56,735  
 
Operating expenses:
Cost of products sold (b) (5 ) 5,188 5,183 173 4,643 4,816
Service, rental and maintenance (b) 10,829 2,203 13,032 12,034 2,269 14,303
Selling and marketing 2,476 3,740 6,216 3,048 2,605 5,653
General and administrative 11,181 1,971 13,152 11,508 1,661 13,169
Severance and restructuring - - - 9 13 22
Depreciation, amortization and accretion   2,396         1,411         3,807     2,815         1,700         4,515  
Total operating expenses   26,877         14,513         41,390     29,587         12,891         42,478  
% of total revenue 69.3 % 101.1 % 77.9 % 66.8 % 103.4 % 74.9 %
                           
Operating income (loss)   11,902         (162 )       11,740     14,678         (421 )       14,257  
% of total revenue 30.7 % -1.1 % 22.1 % 33.2 % -3.4 % 25.1 %
 
Interest expense, net (64 ) - (64 ) (188 ) - (188 )
Other income (expense), net   89         (8 )       81     (46 )       (16 )       (62 )
Income (loss) before income tax (expense) benefit 11,927 (170 ) 11,757 14,444 (437 ) 14,007
Income tax (expense) benefit   (4,897 )       65         (4,832 )   (5,718 )       173         (5,545 )
Net income (loss) $ 7,030       $ (105 )     $ 6,925   $ 8,726       $ (264 )     $ 8,462  
 
Basic net income per common share $ 0.32   $ 0.38  
Diluted net income per common share $ 0.32   $ 0.37  
 
Basic weighted average common shares outstanding   21,688,153     22,106,543  
Diluted weighted average common shares outstanding   21,904,862     22,589,483  
 
 
Reconciliation of operating income (loss) to EBITDA (c):
Operating income (loss) $ 11,902 $ (162 ) $ 11,740 $ 14,678 $ (421 ) $ 14,257
Add back: depreciation, amortization and accretion   2,396         1,411         3,807     2,815         1,700         4,515  
EBITDA $ 14,298       $ 1,249       $ 15,547   $ 17,493       $ 1,279       $ 18,772  
% of total revenue 36.9 % 8.7 % 29.3 % 39.5 % 10.3 % 33.1 %
 
Key statistics:
Units in service 1,480 - 1,480 1,617 - 1,617
Average revenue per unit (ARPU) $ 8.25 $ - $ 8.25 $ 8.50 $ - $ 8.50
Bookings $ - $ 14,253 $ 14,253 $ - $ 12,417 $ 12,417
Backlog $ - $ 40,183 $ 40,183 $ - $ 32,688 $ 32,688

(a) Slight variations in totals are due to rounding.

(b) Wireless results reflect eliminations for intercompany revenue and expenses.

(c) EBITDA or earnings before interest, taxes, depreciation, amortization and accretion is a non-GAAP measure and is presented for analytical purposes only.

       
USA MOBILITY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (a)
(In thousands)
 

3/31/13

12/31/12

(Unaudited)
 
Assets
Current assets:
Cash and cash equivalents $ 71,694 $ 61,046
Accounts receivable, net 20,191 21,580
Prepaid expenses and other 5,907 5,836
Inventory 3,032 3,257
Escrow receivables 275 275
Deferred income tax assets, net   4,929       3,915
Total current assets 106,028 95,909
Property and equipment, net 20,783 20,809
Goodwill 133,031 133,031
Other intangible assets, net 29,088 30,333
Deferred income tax assets, net 35,642 41,239
Other assets   1,243       1,306
Total assets $ 325,815     $ 322,627
 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities $ 12,876 $ 12,659
Accrued compensation and benefits 16,715 17,806
Consideration payable 275 275
Customer deposits 2,660 2,090
Deferred revenue   26,911       27,896
Total current liabilities 59,437 60,726
Deferred revenue 605 693
Other long-term liabilities   9,594       9,789
Total liabilities   69,636       71,208
Commitments and contingencies
Stockholders' equity:
Preferred stock - -
Common stock 2 2
Additional paid-in capital 125,823 125,212
Retained earnings   130,354       126,205
Total stockholders' equity   256,179       251,419
Total liabilities and stockholders' equity $ 325,815     $ 322,627
 
(a) Slight variations in totals are due to rounding.
       
USA MOBILITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (a)

(Unaudited and in thousands)

 
For the three months ended

3/31/13

3/31/12

 
Cash flows from operating activities:
Net income $ 6,925 $ 8,462
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation, amortization and accretion 3,807 4,515
Amortization of deferred financing costs 64 65
Deferred income tax expense 4,570 5,387
Amortization of stock based compensation 626 437
Provision for doubtful accounts, service credits and other 405 411
Adjustment of non-cash transaction taxes (132 ) (123 )
(Gain)/Loss on disposals of property and equipment (1 ) 162
Changes in assets and liabilities:
Accounts receivable 984 358
Prepaid expenses, intangibles and other assets 161 118
Accounts payable and accrued liabilities (1,236 ) (3,680 )
Customer deposits and deferred revenue   (503 )       (171 )
Net cash provided by operating activities   15,670         15,941  
 
Cash flows from investing activities:
Purchase of property and equipment (2,341 ) (1,551 )
Proceeds from disposals of property and equipment   1         8  
Net cash used in investing activities   (2,340 )       (1,543 )
 
Cash flows from financing activities:
Repayment of debt - (25,000 )
Cash dividends to stockholders   (2,682 )       (5,535 )
Net cash used in financing activities   (2,682 )       (30,535 )
 
 
Net increase/(decrease) in cash and cash equivalents 10,648 (16,137 )
Cash and cash equivalents, beginning of period   61,046         53,655  
Cash and cash equivalents, end of period $ 71,694       $ 37,518  
 
Supplemental disclosure:
Interest paid $ 4       $ 220  
Income taxes paid $ 168       $ 224  
 
(a) Slight variations in totals are due to rounding.
                   
USA MOBILITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (a)

(Unaudited and in thousands, except share, per share amounts and ARPU)

 
For the three months ended

3/31/13

12/31/12

9/30/12

6/30/12

3/31/12

 
Revenues:
Paging service $ 37,051 $ 38,081 $ 39,235 $ 40,548 $ 41,875
Cellular 195 275 314 286 277
Software revenue and other 15,723 13,381 15,321 14,847 14,257
Other   161         147         246         280         326  
Total revenues   53,130         51,884         55,116         55,961         56,735  
 
Operating expenses:
Cost of products sold 5,183 5,709 5,105 5,216 4,816
Service, rental and maintenance 13,032 13,499 13,731 13,892 14,303
Selling and marketing 6,216 6,030 6,043 5,919 5,653
General and administrative 13,152 12,551 12,466 12,494 13,169
Severance and restructuring - 1,712 - 24 22
Depreciation, amortization and accretion 3,807 4,387 4,724 4,606 4,515
Impairment   -         3,382         -         -         -  
Total operating expenses   41,390         47,270         42,069         42,151         42,478  
% of total revenues 77.9 % 91.1 % 76.3 % 75.3 % 74.9 %
 
Operating income 11,740 4,614 13,047 13,810 14,257
% of total revenues 22.1 % 8.9 % 23.7 % 24.7 % 25.1 %
 
Interest expense, net (64 ) (62 ) (64 ) (66 ) (188 )
Other income (expense), net   81         289         52         436         (62 )
Income before income tax expense 11,757 4,841 13,035 14,180 14,007
Income tax expense   (4,832 )       (2,814 )       (4,987 )       (5,733 )       (5,545 )
Net income $ 6,925       $ 2,027       $ 8,048       $ 8,447       $ 8,462  
 
Basic net income per common share $ 0.32       $ 0.09       $ 0.37       $ 0.38       $ 0.38  
Diluted net income per common share $ 0.32       $ 0.09       $ 0.36       $ 0.37       $ 0.37  
 
Basic weighted average common shares outstanding   21,688,153         21,492,792         21,973,473         22,130,397         22,106,543  
Diluted weighted average common shares outstanding   21,904,862         21,991,673         22,399,934         22,613,517         22,589,483  
 
Reconciliation of operating income to EBITDA (b):
Operating income $ 11,740 $ 4,614 $ 13,047 $ 13,810 $ 14,257
Add back: depreciation, amortization, accretion and impairment   3,807         7,769         4,724         4,606         4,515  
EBITDA $ 15,547       $ 12,383       $ 17,771       $ 18,416       $ 18,772  
% of total revenues 29.3 % 23.9 % 32.2 % 32.9 % 33.1 %
 
Key statistics:
Units in service 1,480 1,515 1,546 1,583 1,617
Average revenue per unit (ARPU) $ 8.25 $ 8.29 $ 8.36 $ 8.45 $ 8.50
Bookings $ 14,253 $ 18,129 $ 15,670 $ 15,085 $ 12,417
Backlog $ 40,183 $ 40,626 $ 36,155 $ 34,391 $ 32,688

(a) Slight variations in totals are due to rounding.

(b) EBITDA or earnings before interest, taxes, depreciation, amortization, accretion and impairment is a non-GAAP measure and is presented for analytical purposes only.

                   
USA MOBILITY, INC.
CONSOLIDATED OPERATING EXPENSES
SUPPLEMENTAL INFORMATION (a)

(Unaudited and in thousands)

 
For the three months ended

3/31/13

12/31/12

9/30/12

6/30/12

3/31/12

 
Cost of products sold
Payroll and related $ 2,838 $ 2,634 $ 2,427 $ 2,324 $ 2,368
Cost of sales 1,890 2,500 2,195 2,434 2,037
Other   455       575       483       458         411
Total cost of products sold   5,183       5,709       5,105       5,216         4,816
 
Service, rental and maintenance
Site rent 4,235 4,326 4,326 4,421 4,791
Telecommunications 1,889 2,053 2,257 2,346 2,312
Payroll and related 5,203 5,432 5,309 5,360 5,529
Stock based compensation 10 7 6 6 6
Other   1,695       1,681       1,833       1,759         1,665
Total service, rental and maintenance   13,032       13,499       13,731       13,892         14,303
 
Selling and marketing
Payroll and related 3,594 3,519 3,504 3,544 3,559
Commissions 1,387 1,197 1,335 1,343 1,253
Stock based compensation 17 19 19 18 16
Other   1,218       1,295       1,185       1,014         825
Total selling and marketing   6,216       6,030       6,043       5,919         5,653
 
General and administrative
Payroll and related 6,026 6,423 5,851 5,972 6,490
Stock based compensation 599 296 435 (19 ) 415
Bad debt 275 300 275 270 234
Facility rent 844 889 903 868 806
Telecommunications 375 379 390 443 412
Outside services 3,077 2,377 2,353 2,458 2,447
Taxes, licenses and permits 1,233 1,312 1,249 1,426 1,501
Other   723       575       1,010       1,076         864
Total general and administrative   13,152       12,551       12,466       12,494         13,169
 
Severance and restructuring - 1,712 - 24 22
Depreciation, amortization and accretion 3,807 4,387 4,724 4,606 4,515
Impairment   -       3,382       -       -         -
Total operating expenses $ 41,390     $ 47,270     $ 42,069     $ 42,151       $ 42,478
 
Capital expenditures $ 2,341 $ 2,854 $ 2,696 $ 2,888 $ 1,551
 
(a) Slight variations in totals are due to rounding.
                   
USA MOBILITY, INC. (WIRELESS)
UNITS IN SERVICE ACTIVITY (a)

(Unaudited and in thousands)

 
For the three months ended

3/31/13

12/31/12

9/30/12

6/30/12

3/31/12

Units in service

 
Beginning units in service
Direct one-way 1,346 1,366 1,395 1,423 1,465
Direct two-way 75       79       82       85       90  
Total direct 1,421       1,445       1,477       1,508       1,555  
Indirect one-way 48 55 58 60 63
Indirect two-way 46       46       48       49       50  
Total indirect 94       101       106       109       113  
Total beginning units in service 1,515       1,546       1,583       1,617       1,668  
 
Gross placements
Direct one-way 39 46 45 49 41
Direct two-way 3       2       3       4       3  
Total direct 42       48       48       53       44  
Indirect one-way 1 2 1 2 1
Indirect two-way -       -       -       -       -  
Total indirect 1       2       1       2       1  
Total gross placements 43       50       49       55       45  
 
Gross disconnects
Direct one-way (61 ) (66 ) (74 ) (77 ) (83 )
Direct two-way (5 )     (6 )     (6 )     (7 )     (8 )
Total direct (66 )     (72 )     (80 )     (84 )     (91 )
Indirect one-way (11 ) (9 ) (4 ) (4 ) (4 )
Indirect two-way (1 )     -       (2 )     (1 )     (1 )
Total indirect (12 )     (9 )     (6 )     (5 )     (5 )
Total gross disconnects (78 )     (81 )     (86 )     (89 )     (96 )
 
Net loss
Direct one-way (22 ) (20 ) (29 ) (28 ) (42 )
Direct two-way (2 )     (4 )     (3 )     (3 )     (5 )
Total direct (24 )     (24 )     (32 )     (31 )     (47 )
Indirect one-way (10 ) (7 ) (3 ) (2 ) (3 )
Indirect two-way (1 )     -       (2 )     (1 )     (1 )
Total indirect (11 )     (7 )     (5 )     (3 )     (4 )
Total net change (35 )     (31 )     (37 )     (34 )     (51 )
 
Ending units in service
Direct one-way 1,324 1,346 1,366 1,395 1,423
Direct two-way 73       75       79       82       85  
Total direct 1,397       1,421       1,445       1,477       1,508  
Indirect one-way 38 48 55 58 60
Indirect two-way 45       46       46       48       49  
Total indirect 83       94       101       106       109  
Total ending units in service 1,480       1,515       1,546       1,583       1,617  
 
(a) Slight variations in totals are due to rounding.
                   
USA MOBILITY, INC. (WIRELESS)
AVERAGE REVENUE PER UNIT (ARPU) AND CHURN (a)

(Unaudited)

 
For the three months ended

3/31/13

12/31/12

9/30/12

6/30/12

3/31/12

 

ARPU

Direct one-way $ 7.73 $ 7.78 $ 7.84 $ 7.89 $ 7.91
Direct two-way   20.41         20.52         20.55         20.88         21.08  
Total direct 8.40 8.47 8.54 8.62 8.67
 
Indirect one-way 8.22 7.51 7.25 7.48 7.61
Indirect two-way   3.76         3.87         4.08         4.19         4.33  
Total indirect 5.85 5.74 5.77 5.97 6.14
 
Total one-way 7.74 7.77 7.82 7.88 7.90
Total two-way   13.96         14.16         14.36         14.69         15.00  
Total paging ARPU $ 8.25       $ 8.29       $ 8.36       $ 8.45       $ 8.50  
 
 
 

Gross disconnect rate (b)

Direct one-way -4.6 % -4.8 % -5.3 % -5.4 % -5.7 %
Direct two-way   -6.6 %       -7.8 %       -7.7 %       -8.5 %       -8.3 %
Total direct -4.7 % -5.0 % -5.5 % -5.6 % -5.8 %
 
Indirect one-way -23.6 % -16.1 % -7.6 % -6.6 % -7.0 %
Indirect two-way   -1.6 %       -1.6 %       -3.1 %       -1.8 %       -1.7 %
Total indirect -12.5 % -9.3 % -5.5 % -4.4 % -4.7 %
 
Total one-way -5.2 % -5.3 % -5.4 % -5.4 % -5.8 %
Total two-way   -4.7 %       -5.4 %       -6.0 %       -6.0 %       -5.9 %
Total paging gross disconnect rate   -5.2 %       -5.3 %       -5.5 %       -5.5 %       -5.8 %
 
 
 

Net loss (c)

Direct one-way -1.7 % -1.5 % -2.1 % -1.9 % -2.9 %
Direct two-way   -1.9 %       -4.9 %       -4.0 %       -3.9 %       -4.9 %
Total direct -1.7 % -1.7 % -2.2 % -2.0 % -3.0 %
 
Indirect one-way -21.8 % -13.2 % -5.6 % -4.9 % -5.4 %
Indirect two-way   -1.3 %       -1.3 %       -2.5 %       -1.2 %       -0.9 %
Total indirect -11.5 % -7.6 % -4.2 % -3.2 % -3.4 %
 
Total one-way -2.4 % -1.9 % -2.2 % -2.0 % -3.0 %
Total two-way   -1.6 %       -3.5 %       -3.5 %       -2.9 %       -3.5 %
Total paging net loss rate   -2.3 %       -2.0 %       -2.3 %       -2.1 %       -3.0 %

(a) Slight variations in totals are due to rounding.

(b) Gross disconnect rate is current period disconnected units divided by prior period ending units in service.

(c) Net loss rate is net current period placements and disconnected units in service divided by prior period ending units in service.

                   
USA MOBILITY, INC. (WIRELESS)
SUPPLEMENTAL INFORMATION BY MARKET SEGMENT (a)

(Unaudited)

 
For the three months ended

3/31/13

12/31/12

9/30/12

6/30/12

3/31/12

 
Gross placement rate (b)
Healthcare 3.4 % 3.9 % 3.7 % 4.3 % 3.3 %
Government 1.6 % 1.5 % 2.5 % 1.8 % 1.3 %
Large enterprise 2.1 % 2.3 % 2.0 % 1.9 % 2.4 %
Other 1.8 %     1.9 %     2.1 %     2.0 %     2.2 %
Total direct 3.0 % 3.3 % 3.2 % 3.5 % 2.8 %
Total indirect 1.0 %     1.7 %     1.3 %     1.2 %     1.3 %
Total 2.9 %     3.2 %     3.1 %     3.4 %     2.7 %
 
Gross disconnect rate (b)
Healthcare -3.9 % -4.4 % -4.5 % -4.5 % -4.7 %
Government -5.9 % -6.7 % -6.8 % -7.0 % -7.7 %
Large enterprise -7.0 % -5.7 % -7.3 % -8.0 % -7.7 %
Other -7.3 %     -7.0 %     -8.1 %     -8.7 %     -9.2 %
Total direct -4.7 % -5.0 % -5.5 % -5.6 % -5.8 %
Total indirect -12.5 %     -9.3 %     -5.5 %     -4.4 %     -4.7 %
Total -5.2 %     -5.3 %     -5.5 %     -5.5 %     -5.8 %
 
Net loss rate (b)
Healthcare -0.5 % -0.4 % -0.9 % -0.2 % -1.4 %
Government -4.3 % -5.2 % -4.3 % -5.2 % -6.4 %
Large enterprise -4.9 % -3.4 % -5.3 % -6.1 % -5.3 %
Other -5.5 %     -5.1 %     -5.9 %     -6.8 %     -7.1 %
Total direct -1.7 % -1.7 % -2.2 % -2.0 % -3.0 %
Total indirect -11.5 %     -7.6 %     -4.2 %     -3.2 %     -3.4 %
Total -2.3 %     -2.0 %     -2.3 %     -2.1 %     -3.0 %
 
End of period units in service % of total (b)
Healthcare 68.4 % 67.1 % 65.9 % 64.9 % 63.6 %
Government 10.1 % 10.3 % 10.8 % 11.1 % 11.5 %
Large enterprise 8.3 % 8.5 % 8.6 % 8.9 % 9.3 %
Other 7.6 %     7.9 %     8.1 %     8.4 %     8.8 %
Total direct 94.4 % 93.8 % 93.4 % 93.3 % 93.2 %
Total indirect 5.6 %     6.2 %     6.6 %     6.7 %     6.8 %
Total 100.0 %     100.0 %     100.0 %     100.0 %     100.0 %

(a) Slight variations in totals are due to rounding.

(b) Changes in the classification of units in service are reflected in the quarter when such changes are identified. Such changes are then appropriately reflected in calculating the gross placement, gross disconnect and net loss rates.

                   
USA MOBILITY, INC. (WIRELESS)
SUPPLEMENTAL INFORMATION - DIRECT UNITS IN SERVICE AND
CELLULAR ACTIVATIONS (a)

(Unaudited)

 
For the three months ended

3/31/13

12/31/12

9/30/12

6/30/12

3/31/12

 
Account size ending units in service (000's)
1 to 3 units 49 52 55 58 61
4 to 10 units 29 31 33 35 37
11 to 50 units 71 75 78 82 86
51 to 100 units 47 49 50 52 54
101 to 1,000 units 321 334 343 356 373
>1,000 units   880         880         886         894         897  
Total   1,397         1,421         1,445         1,477         1,508  
 
End of period units in service % of total direct
1 to 3 units 3.5 % 3.6 % 3.8 % 3.9 % 4.1 %
4 to 10 units 2.1 % 2.2 % 2.3 % 2.3 % 2.3 %
11 to 50 units 5.1 % 5.3 % 5.4 % 5.6 % 5.7 %
51 to 100 units 3.4 % 3.5 % 3.5 % 3.5 % 3.6 %
101 to 1,000 units 23.0 % 23.5 % 23.7 % 24.1 % 24.8 %
>1,000 units   62.9 %       61.9 %       61.3 %       60.6 %       59.5 %
Total   100.0 %       100.0 %       100.0 %       100.0 %       100.0 %
 
Account size net loss rate
1 to 3 units -4.8 % -5.5 % -5.3 % -5.7 % -6.2 %
4 to 10 units -6.0 % -5.5 % -4.8 % -6.2 % -6.2 %
11 to 50 units -4.8 % -4.6 % -4.8 % -4.1 % -7.1 %
51 to 100 units -4.0 % -2.6 % -3.9 % -2.4 % -3.9 %
101 to 1,000 units -3.9 % -2.6 % -3.8 % -4.7 % -1.7 %
>1,000 units   -0.2 %       -0.6 %       -1.0 %       -0.3 %       -2.7 %
Total   -1.7 %       -1.7 %       -2.2 %       -2.0 %       -3.0 %
 
Account size ARPU
1 to 3 units $ 15.22 $ 15.29 $ 15.43 $ 15.49 $ 15.49
4 to 10 units 14.33 14.39 14.42 14.40 14.45
11 to 50 units 12.06 12.04 12.11 12.24 12.15
51 to 100 units 10.47 10.47 10.48 10.35 10.52
101 to 1,000 units 8.84 8.94 8.97 9.01 9.04
>1,000 units   7.23         7.24         7.28         7.34         7.35  
Total $ 8.40       $ 8.47       $ 8.54       $ 8.62       $ 8.67  
 
 
Cellular:
Number of activations   925         1,041         948         1,052         1,070  
Revenue from cellular services (000's) $ 195       $ 275       $ 314       $ 286       $ 277  
 
(a) Slight variations in totals are due to rounding.
       
USA MOBILITY, INC.
2013 FINANCIAL GUIDANCE
 

(In millions)

 
Guidance Range
From To
Revenues
Wireless $ 140 $ 150
Software   55   63
Combined $ 195 $ 213
 
Operating Expenses (a)
Wireless $ 99 $ 92
Software   53   58
Combined $ 152 $ 150
 
Capital Expenses
Wireless $ 9.5 $ 7.5
Software   0.2   0.6
Combined $ 9.7 $ 8.1
 
(a) Operating expenses exclude depreciation, amortization and accretion.

Contact:
USA Mobility, Inc.
Bob Lougee, 800-611-8488
bob.lougee@usamobility.com
View Comments